By Rob Whiteman, CIPFA CEO
One of the things I most admire about those working in local government is their ability to manage a crisis. During World War II, councils operated at the heart of the home front effort – coordinating emergency committees and providing relief to struggling families. More recently, councils have been planning for the potential economic impacts of Brexit scenarios, with table top scenario planning and live dummy runs of possible outcomes. In the last months alone, councils have been activating emergency plans to deal with seasonal flooding, helping communities and businesses deal with the physical devastation of their homes and places of work.
And now we have coronavirus - the current crisis facing local government in the spread of this disease is unprecedented. I have a great deal of confidence that the sector will prove its mettle once again.
Back in December, which seems a lifetime ago, we published the Resilience Index showing, that despite many years of financial strain, the majority of local authorities have found ways to maintain resilient positions.
But this track record must not lead to complacency by government regarding this new and unprecedented challenge. CIPFA urges the government not to underestimate the severity of the financial impact this crisis is likely to have, and to be fully aware of the scale of the challenge faced by all public services beyond the NHS. Despite the fact that councils have been able to maintain resilient financial positions amid deep budget cuts, the absence of a long-term funding solution already implied that this position will not be sustainable for the future. But now a financial tsunami of reduced income and increased cost is heading in councils’ way. While it’s vital that our health service is given everything it needs to fight this disease, we must not forget the crucial role of services like public health, social care and all community services.
This may require a temporary or new set of rules for local government finance. Councils may need to borrow in order to fund services – government should be underwriting what is needed to keep councils solvent as it is already doing for businesses and the NHS. In a time of crisis, councils cannot be put in a position where they feel issuing a section 114 notice could be necessary.
Clearly public health services in local government have a key role to play, and only this week, two weeks from the end of the financial year, have they received clarity on their funding for 2020/21. Whilst the £145m increase in public health grant signals a welcome end to the cuts seen in recent years, it falls far short of the £1bn required to restore real terms funding to previous levels and account for demographic change. It is also a well-known fact that local government is already struggling under the pressures of social care, with most councils already significantly overspending on budgets due to increasing levels of demand. These pressures exist regardless of the additional strains that will come as a result of the outbreak.
We at CIPFA are in complete agreement with the government. We must do whatever it takes to overcome this challenge. This virus will not respect the boundaries of our silos, and so we must work beyond them. It is key that the allocation of government resources allow us to do this, for the good of all.
This article first appeared in the Local Government Chronicle.